Purchasing and Supply a Neglected Function in Nigeria: Implication on Profitability

International Journal of Research and Innovation in Social Science (IJRISS) | Volume IV, Issue V, May 2020 | ISSN 2454–6186

Purchasing and Supply a Neglected Function in Nigeria: Implication on Profitability

Spencer G. O. Okpighe
Department of Marketing, Delta State Polytechnic, Ozoro, Nigeria

Abstract – The growth of every business enterprise depends on the level of profit it makes. One of the ways profit can be maximized is through application of the purchasing and supply strategic function. This paper attempt to examine purchasing and supply a neglected function in Nigeria and its implication on profitability with special focus on manufacturing industries. The findings proved that purchasing function is relegated to the background and regarded as a mere clerical function in most organisations compared with other business functions. However, where few purchasing departments exist, the function is handled by non-professionals. This paper concludes that the negative effect of this neglect is on the profitability of the manufacturing industries. The author therefore recommend that to avoid low profit perhaps business failure, purchasing and supply function should be practiced as a business function with the involvement of professionals. The purchasing function should be seen as integral part of a top corporate business strategy.

Keywords: Purchasing and Supply, Function, Implication, Profitability, Manufacturing industries

I. INTRODUCTION

Purchasing and supply is a business concept, function and a major contributor to profit maximization. The overriding concern is that purchased raw materials, goods and services are one of the major elements of cost for manufacturing industries. According to Zima, Klumpp, Regattieri and Herbage (2019), industrial firms spend more than half of their turnover on supplies that is why the purchasing function has become a central success factor for modern firms. Jain and Patidar (2011) described purchasing as a business activity directed to securing the materials, suppliers and equipment required in the operations of an organisation. Over the past four decades, according to Temidayo, Olawale and Oluseyi (2012), purchasing has evolved from a clerical function in the 1960s, through being an operational activity in the 1980s to a strategic nature in the 1990s.However, till date, the purchasing function is constantly changing and expanding in scope.

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